Background credit check laws for pre-employment

Written by cecilia mccormick
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Background credit check laws for pre-employment
Credit checks are becoming more commonplace in screening job applicants. (photo checkbox credit image by Aleksandar Radovanovic from

In addition to resumés and interviews, employers may use a number of resources to evaluate a potential employee. One of the checks an employer may perform is a credit check. It is important for job seekers to know their rights regarding a credit check and what to do if they are denied employment because of a credit check.

Why Do Employers Request Credit Checks?

An employer may request a credit check to verify previous employment. Some employers use credit reports to gauge the applicant's level of responsibility. Many banks and financial institutes want to make sure the people they are hiring are financially stable and less likely to steal money. The Fair Credit Reporting Act (FCRA) requires that the employer obtain the applicant's written consent before performing a credit check.

What's On An Employment Credit Report?

An employment credit report includes most of the same information that a regular credit report offers. It may include the person's address, previous employers, loans, credit card accounts and payment history. It does not include the person's date of birth or credit score.

Being Denied Employment

If a job applicant is denied employment due to a credit check, the employer is required to inform the person and provide them with the name and contact information of the credit agency. The applicant is then eligible for a free credit report. If the applicant finds inaccuracies in the credit report, they may contact the credit agency and dispute them. The agency will then investigate the discrepancies and remove or correct them.

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